What’s the secret to a more innovative workforce? New research points to LGBTQ+ inclusion

In today’s competitive business landscape, the race to innovate has never been more intense. But while many organisations chase disruptive technologies and digital transformation, new research suggests that a key driver of innovation lies within the workforce itself—specifically, in how inclusive the workplace is for LGBTQ+ employees.

A recent study by researchers from Aalto University and the University of Vaasa revealed a strong link between LGBTQ-friendly corporate policies and innovation performance. Spanning data from 2003 to 2017, the research demonstrated that organisations with progressive LGBTQ+ policies not only produce more patents but also generate patents that are more widely cited and of higher quality.

Jukka Sihvonen, Assistant Professor at Aalto University School of Business and one of the lead authors of the study, said, “Our results demonstrate that organisations with progressive LGBTQ+ policies produce more patents, have more patent citations, and have higher innovation quality as measured by patent originality, generality, and internationality.”

Using scores from the Human Rights Campaign’s Corporate Equality Index (CEI), which evaluates corporate LGBTQ+ inclusivity across several dimensions, the researchers examined patent activity and quality using data from the US Patent and Trademark Office. The results revealed a clear pattern: for every standard deviation increase in an organisation’s CEI score, the number of patents increased by 20%. Moreover, the number of patent citations—an indicator of how valuable and influential a patent is—rose by nearly 25%.

These findings were more than just statistical insights; they offer a roadmap for HR professionals looking to build both a more inclusive and innovative workplace. According to Sihvonen, the study builds on prior research showing that progressive HR policies boost employee wellbeing, retention, and profitability—particularly in knowledge-driven organisations.

“We were inspired by Tim Cook, CEO of Apple, who stated: ‘I’ve had the good fortune to work at an organisation that loves creativity and innovation and knows it can only flourish when you embrace people’s differences,’” said Sihvonen. “We want to test whether Tim’s experiences can be generalised to other large organisations in the US.”

For HR leaders, the message is clear: inclusive practices are not just about equity—they are also about business performance.

“From an HR perspective, LGBTQ+ policies need to be tangible,” said Sihvonen, “supporting workplace equality in practical terms like equal opportunity and benefits, as well as organisational development through employee training and diversity councils.”

READ MORE: DE&I in Asia-Pacific: Will US policy rollbacks reshape workplaces?

The research team is currently working on a follow-up project exploring which specific components of LGBTQ-friendly policies are most strongly correlated with financial and operational performance. Early findings suggest that practices such as prohibiting discrimination based on sexual orientation or gender identity, providing equal health benefits for transgender individuals, and building partnerships with other LGBTQ-supportive organisations are particularly impactful.

When these structures are in place, the benefits for talent management become clear. “With inclusive policies that directly and openly support LGBTQ+ individuals, there is a greater chance that LGBTQ+ talent will pursue advanced positions and remain in them,” he said. “Diverse talent is more likely to be loyal to organisations where they can be comfortably out and supported by inclusive policies and a friendly culture.”

And in an age of hyper-transparency, an organisation’s true colours are easily revealed. “Social media and online portals for organisation reviews, like Glassdoor.com, ensure that mere ‘pink-washing’ does not take organisations far in attracting the LGBTQ+ community,” Sihvonen warned.

Authenticity is key, and it cannot be imposed from the top alone. While management buy-in is critical, creating a truly inclusive environment is a shared responsibility. “It’s important to realise that achieving an inclusive culture is not only the CEO’s responsibility—inclusivity is a team responsibility that requires authentic commitment at all levels,” he emphasised.

For HR leaders facing pushback against diversity, equity, and inclusion (DEI) initiatives, this research provides a data-driven argument. “Innovation is the fuel that drives both growth and profitability. Companies need innovation,” Sihvonen concluded. “The magnitudes of impact linked to LGBTQ-friendliness are big—and that means that the economic significance is too.”